Stocks Hit Pause After a Record Run

Stocks took a breather from their recent rally, as declines in some of the year's best-performing sectors weighed on indexes.

The Dow Jones Industrial Average slipped 19.12 points, or 0.1%, to 15335.28, on Monday. The Standard & Poor's 500-stock index shed 1.18 points, or 0.1%, to 1666.29. Monday was just the fourth session in May the index has notched a decline. The Nasdaq Composite Index fell 2.53 points, or 0.1%, to 3496.43.

In the Markets

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Shares have gone on a tear in recent weeks. The Dow industrials jumped 1.6% last week, while the S&P 500 rallied 2.1% and the Nasdaq gained 1.8%. The rallies came alongside corporate earnings reports that were slightly better than expected but sales that missed Wall Street forecasts.

Rising stocks paired with so-so earnings growth have led to an expansion in the price/earnings ratio on the S&P 500, known as the multiple.

"As concern about risks continues to fade, and confidence in the recovery grows, you're getting exactly the type of multiple expansion that hasn't been seen over the past few years," said
Dan Greenhaus,
chief global strategist at brokerage firm BTIG LLC.

The S&P 500's consumer-staples sector notched the biggest losses in the index Monday, declining 1%. Also among the laggards was the health-care sector, the biggest gainer in the S&P 500 in 2013. Health-care shares declined 0.6% but have risen 22% this year. Consumer staples have also outperformed the S&P 500's 17% year-to-date gain, rising 19%. Those declines outweighed a 1.3% rise from energy shares. The energy sector has underperformed the index this year, adding 14%.

"When you've had the strong bull market that we've had, everybody's looking for the opportunities," said
Bill Stone,
chief investment strategist at PNC Asset Management Group, which manages $117 billion in assets. "Energy in general has been a laggard."

Mr. Stone said he is neutral on U.S. stocks given the year's strong rally, but within the firm's stockholdings he prefers dividend-paying shares.

"It's been a phenomenally good place to be," he said. "People can't get any income in fixed income" as interest rates remain low, he said.

Investors are looking ahead to Wednesday, when Federal Reserve Chairman Ben Bernanke will testify to Congress and the Fed will release the minutes of its most recent policy-setting meeting.

European markets turned higher in late trading. The Stoxx Europe 600 gained 0.3% to close at a high for the year. France's CAC-40, Germany's DAX and London's FTSE 100 also closed at highs for 2013.

Crude oil gained 0.7%, to settle at $96.71 a barrel. Gold gained 1.4%, to settle at $1,384.30 a troy ounce. Silver rose 1%, to $22.5680 a troy ounce, after the precious metal plunged 9.4% in the first 10 minutes of Asian trading.

The dollar fell back below ¥103 and lost some ground against the euro. Demand fell for the 10-year Treasury note, pushing the yield up to 1.965%.

Most Asian markets traded higher. Japan's Nikkei Stock Average climbed 1.5% after the Japanese government raised its assessment of the country's economy. That offset some strengthening in the yen following comments over the weekend by Japanese Economy Minister
Akira Amari
that further weakness in the currency could be harmful.

In corporate news,
Yahoo
rose six cents, or 0.2%, to $26.58, after the company's board approved a $1.1 billion deal to buy blogging site Tumblr.

Chesapeake Energy
gained 53 cents, or 2.6%, to 20.80, after the oil-and-gas company named
Robert Lawler,
previously an executive with rival
Anadarko Petroleum
,
its new chief executive. Mr. Lawler succeeds co-founder
Aubrey McClendon
,
who left amid pressure from board members recently installed by Chesapeake's largest shareholders, The Wall Street Journal reported.

Warner Chilcott
climbed 30 cents, or 2%, to 19.60. The Dublin-based maker of prescription dermatology products for women agreed to be acquired by Actavis in a stock deal that values Warner Chilcott at roughly $5 billion. Actavis gained 1.65, or 1.3%, to 127.15.

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